Gujarat Lease Financing Ltd. v. Competent Automobiles Co. Ltd.

Mukul Mudgal, J.— This is an application under Order XII Rule 6, CPC read with Order X Rule 2, CPC by the plaintiff (G.L.F.L), seeking a decree under Order XII Rule 6, CPC on the ground of what are averred to be admissions by the defendant. Before going into the issue raised in this application, it is profitable to set out the provisions of Order 12 Rule 6, CPC which read as follows:

“Order XII. Admission—

6. Judgment on admissions—(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.

(2) Whenever a judgment is pronounced under Sub-rule (1) a decree shall be drawn upon in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.”

2. The learned Counsel for the plaintiff, Ms. Anjali Sharma by way of this application sought to rely upon what according to her were admissions of fact made not in the pleadings but otherwise by the defendant in certain letters, the genuineness and authenticity of which was not denied by the learned Counsel for the defendant. The case set out in the plaint shows that it is a recovery suit filed by the plaintiff for the purpose of recovering the amount paid by it for booking cars in the month of January, 1996 and allegations in the plaint are that the principal sum of Rs. 1,51,61,244/- was misappropriated by the defendant firstly by not delivering vehicles and then by forcibly seeking to adjust the sum in respect of balance amount due on the shares allotted to an entirely separate entity GLFL Securities (GSL). The plaintiff's case is that the admissions are clearly discernible from the fact that the receipt of the amount has not been denied though an unfounded explanation has been given for the payment of the said amount to an entirely different entity namely GLFL Securities Limited. Learned Counsel for the the plaintiff states that the receipt of the amount not having been denied by the defendant and only a lame explanation given for the adjustment of that amount, the plaintiff is entitled to a decree based upon this averment. The case of the defendant inter alia is that the GLSF Ltd. (plaintiff) had applied for 1,50,000 equity shares and paid an amount of Rs. 52,50,000/- by cheque No. 342515 dated 17.6.95 vide application No. 5577960 and further applied similarly by application No. 557961 for 1,50,000 shares were applied for by GLFL Securities which paid Rs. 52,50,000/- by cheque No. 497629 dated 17.6.95 The shares of GLFL/plaintiff stood fully paid up on 10.1.96 when GLFL sent demand drafts for Rs. 1,51,61,244/- and this was acknowledged by putting up stickers. Drop of share prices between January and July 1996 in the Auto trade in particular led to a fall in the share prices which fell from 26.10 in the beginning of July closing at the end of July at Rs. 14.50 GLFL and GAL thus sought to retrieve what in hindsight was not a good investment. Therefore on 30th August, 1986 for the first time a wrong claim was put up that a sum of Rs. 1,51,61,244/- was not towards the share allotment money but towards car booking. Thus the sum and substance of the defendant is that a sum of Rs. 1,51,61,244 was not towards car bookings but towards payment of share allotment money.

3. The learned Counsel for the defendant has further, submitted that GSL is a wholly owned subsidiary of the plaintiff, which fact was not denied by the learned Counsel for the plaintiff, and disputes between the parties had arisen because of the allotment of shares made by the defendant pursuant to the public issue and disputes have arisen in respect of the call money. The learned Counsel for the defendant submits that accordingly since the value has been adjusted, the attempt has been made by the plaintiff to resile from payment of the second call money which was adjusted in the manner delineated in the written statement.

4. The learned Counsel for the plaintiff has relied upon the judgment of a Division Bench of this Court in Surjit Sachdev… v. Kazakhstan Investment Services Pvt. Ltd. & Ors.…, 66 (1997) DLT 54 (DB), relevant portion whereof reads as under:

“……Only on unequivocal admission of the above two factors will entitle the plaintiff to a decree on admission. Admission need not be made expressly in the pleadings. Even on constructive admissions Court can proceed to pass a decree in plaintiff's favour.”

5. The learned Counsel for the plaintiff has thus submitted that the admission by the defendant is though not expressly made but has been constructively made and can easily be deduced in view of the fact that a receipt of the amount has not been disputed.

6. The learned Counsel for the defendant has relied on the judgment of the Supreme Court in Chikkam Koteswara Rao v. Chikkan Subharao, (1970) 1 SCC 558 : AIR 1971 SC 1542, which has held that admission must be clear and conclusive and there should be no doubt or ambiguity about the alleged admission. Reliance has been placed by the plaintiff on letters of the defendant dated 17th August, 1996 and 3rd September, 1996 and also on the admission made in the written statement about the issuance of such a letter. The relevant portion of letter dated 17th August, 1996 reads as follows:

“Dear Sir,

Please refer to your fax dated 17.8.96 and letter dated 14.8.96 regarding pending bookings.

Your office was kind enough to apply for 3 lacs shares in our public issue. The payment of Rs. 1,51,61,244/- received from you was adjusted as follows:

Allotment Money on 299200.00 shares @ Rs. 35/- per share 1,04,44,000.00 Interest on late payment @ 18% 7,62,270.00 Deposit money due to us 41,00,000.00 Total Amount 1,53,06,270.00 Less received 1,51,61,244.00 Balance outstanding 1,45,026.00

Your local office in Delhi was reminded several times to pay the balance outstanding, which we now request you to remit at the earliest.

There is no booking pending with us as no money was received against booking of vehicles.

Thanking you,

Yours Faithfully,

For Competent Automobiles Co. Ltd.”

7. The relevant portion of letter dated 3rd September, 1996 reads as follows:

“M/s Gujarat Lease Financing Ltd.

Hasubhai Chambers,

Opp. Town Hall

Ellisbridge

Ahmedabad-380006

Dear Sirs,

This is in response to your letter No. GLFL/GMRF dated 26.08.1996 and fax dated 27.8.1996

It seems there has been some misunderstanding at your end because there was no agreement for buy back or purchase/sale of shares.

At the time of public issue, you had applied for a total number of 1,50,000 shares and the company allotted 1,49,600 shares. The particulars of payments received towards that are as under:

PARTICULARS All amounts in Rupees DEBIT CREDIT By share application money on 1,50,000 shares @ Rs. 35/- per share 52,50,000 To 1,49,600 shares allotted and appropriated the money @ Rs. 35/- per share 52,36,000 To balance adjusted against share premium account on allotment money 14,000 By two drafts received valuing To allotment money 1,49,600 shares @ Rs. 5/- per share 7,48,000 1,51,61,244 To share premium money on 1,49,600 shares @ Rs. 30 per share after adjusting excess money received with application 44,74,000 To interest on late payment of allotment money @ 12% 1,92,284 To repayment of our deposit To interest on above deposit @ 20% 26,00,000 3,19,123 To interest on above deposit @ 20% 3,19,123 To amount transferred to account of Shri Raj Chopra and Smt. Gita Chopra as return of their deposits (principal amount) 15,00,000 To amount transferred to account of M/s GLFL Securities Ltd. 53,27,837 Total 2,04,11,244 2,04,11,244”

8. It is submitted by the plaintiff that the last line of letter dated 3rd September, 1996 is a clear admission that the amount was transferred to GLFL Securities Ltd., i.e, GSL thus entitling the plaintiff to a decree. In my view the both the above letters have to be read together. There is clear averment in the letter dated 17th August, 1996 issued by the defendant that there is no booking pending with the defendant as no money was received for booking of the vehicles. The admission relied upon is said to be contained in the letter dated 3rd September, 1996, and it is said to be found in the portion of the said letter which reads as ‘To amount transferred to account of M/s. GLFL Securities Ltd.’

9. In the light of the facts stated above, it does not amount to an admission as contended by the learned Counsel for the plaintiff. In my view, there is no express admission and the explanation sought to be given for the adjustment of sum of Rs. 25,00,000/- can in no manner be construed to be such admission which entitles the plaintiff to a decree under the provisions of Order XII Rule 6, CPC. It is not open to the plaintiff to rely upon a part of the written statement perceived by it to be in its favour and leave out what is apparently against it and that too in an application under Order XII Rule 6, CPC. The explanation is prima facie tenable and cannot at this stage of the proceedings be construed to be an admission and, accordingly, there is no merit in this application which is dismissed.

CS(OS) No. 654/1998:

10. List the matter on 15th February, 2005 for framing of issues.

11. The learned Counsel for the defendant is permitted to get the pagination of the file done.

Application dismissed.